This help article is meant to explain what Risk Tolerance is and how it works within Shrimpy Advisory.
What is risk tolerance?
Risk tolerance is the mechanism with which your trading strategy is informed within Shrimpy Advisory.
When you create your Shrimpy Advisory account, you will be prompted to take a Risk Questionnaire which will give you a score based on your answers. This score determines which risk tolerance you will be assigned, which will then determine which investment strategy your account will recommend.
Each strategy has 5 tiers based on your total balance, with each tier including additional cryptocurrencies in your portfolio. The purpose behind tiers is both to prevent failed trades due to minimum trade limits imposed by Gemini, as well as to diversify your portfolio as it grows in value.
Tiers will be unlocked quarterly after reaching the required balance. This means if your balance breaches $5001 in January, your account won't get access to Tier 3 until the start of the new quarter in April.
The balance requirements for each tier are:
- Tier 1 (Bitcoin and Ethereum) - $0-$2500
- Tier 2 (Blue Chip) - $2501-$5000
- Tier 3 (Utility) - $5001-$7500
- Tier 4 (DeFi) - $7501-$10,000
- Tier 5 (Layer 1) - >$10,000
Shrimpy Advisory will evaluate and, when necessary, update strategies and our investment recommendations both quarterly and during catastrophic market events.
In the event there is a change to the strategy you've been assigned, you will be required to confirm the changes proposed by Shrimpy Advisory before we will take any form of action on our new investment recommendations. If you do not confirm these changes, your account will continue to invest following your most recently accepted investment recommendations.
Shrimpy Advisory Autopilot
You do also have the option of utilizing our Autopilot feature, which will give consent for Shrimpy Advisory to make the necessary adjustments to your strategy in order to keep your account up to date with our current investment recommendations. This means that you won't have to manually confirm changes to your strategy if and when we make them.
You can read more about our Autopilot feature here.
Have questions, comments, or concerns? Feel free to send an email to AdvisorySupport@Shrimpy.io and one of our Support Agents will get back to you as soon as we're able.